Does DISH Control the Fate of Small Mobile Operators?

AT&T (NYSE: T  ) is hungry, very hungry for more wireless spectrum. So is Verizon (NYSE: VZ  ) . The big carriers are in a race to build out 4G LTE networks with national footprints and they need as many spectrum licenses as they can get.

So both of the nation's largest mobile operators have their eyes on a cache of unused spectrum licenses now held by satellite TV operator DISH Network (Nasdaq: DISH  ) .

But DISH has been holding on to those wireless frequencies for its own future 4G LTE network -- or so it has said. However, the company has told the Federal Communications Commission it won't be able to have that network totally operational until 2016. That announcement has given some smaller mobile operators reason to doubt the company's public agenda.

MetroPCS (NYSE: PCS  ) and T-Mobile are so fearful that DISH is merely stalling for time in order to sell its spectrum to either AT&T or Verizon -- or both -- that they have petitioned the FCC to require DISH to do something to ease their concerns. They want DISH to give up a good-sized chunk of its 2GHz range now to reduce the chances of it falling into the hands of AT&T or Verizon.

It Hertz
MetroPCS and T-Mobile are not the only carriers worried about DISH's plans. The Rural Cellular Association has more than 100 member carriers serving the more sparsely populated regions of the country. Verizon's large spectrum grab from a group of cable companies late last year has already made the association's members nervous about the concentration of spectrum moving even further over to the largest carriers. DISH's announcement has not calmed those fears.

"Many of our members desperately need access to additional spectrum," wrote RCA CEO Steven Berry in a press release. "[I]t is vital that the FCC take certain steps to ensure the service rules ... truly increase competition for mobile broadband services and do not strengthen the duopoly power enjoyed by the largest wireless carriers."

Is DISH waiting for a windfall profit from its spectrum holdings, or is it serious about its LTE plans? Waiting up to four years to find out could be an ulcer-inducing experience for the smaller wireless carriers. With Verizon saying it will run out of network capacity by 2014, the small fries know how strongly the giants will fight for every MHz they can get.

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Fool contributor Dan Radovsky owns shares of AT&T. The Motley Fool has a disclosure policy.

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  • Report this Comment On May 24, 2012, at 9:47 PM, jhf678 wrote:

    It looks like T-Mobile and MetroPCS are going to merge very soon.

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